General Rate Case Glossary

Often known as infrastructure investments, capital projects involve new construction, expansion, renovation or replacement of an existing facility or facilities such as wells, tanks and water mains.

The CPUC regulates all aspects of SJW’s operation and reviews the General Rate Case application. The CPUC regulates services and utilities, protects consumers, safeguards the environment, and ensures Californians have access to safe and reliable utility infrastructure and services.

GRC proceedings are held once every three years and review the costs to operate and maintain the water system, along with the allocation of those costs among customers.

Water sources vary from state-to-state and water system-to-water system throughout the year. Groundwater constitutes approximately 40% of SJW’s water and is pumped from over 100 wells that draw water from the Santa Clara Groundwater Basin. Imported surface water, which originates as snow in the Sierra Nevada Mountains, makes up 50% of SJW’s water supplies, with the remaining water coming from local mountain surface water, and recycled water.

A surcharge is a tool a water company can use to fund specific capital projects or unusual expenses, to provide water quality, or improve quantity. A surcharge has a specific use and is a temporary charge to customers. The surcharge is removed from your bill when the project is paid in full.

There are many ways to look at water affordability. In the past, there’s been one widely-used metric: median household income. However, this only considers one data point.

Real life is more complicated than that. For customers who may have the greatest challenges paying their water bills, it helps to have a more thorough look at affordability.

Recently, the California Public Utilities Commission (CPUC) published its 2019 Annual Affordability Report.  This comprehensive report looks at three different ways of measuring affordability:

• Hours at Minimum Wage (HM) – Describes essential service bills in terms of worked hours at minimum wage required to pay for them. It provides a clear illustration of the impact of utility costs on the daily lives of low-wage ratepayers compared to the dollar amount alone.
• Socioeconomic Vulnerability Index (SEVI) – Describes the relative socioeconomic characteristics of communities—in terms of poverty, unemployment, educational attainment, linguistic isolation, and percent of income spent on housing—to quantify how the same utility cost may affect one community’s ability to pay vs. another.
• Affordability Ratio (AR) – Describes the impact an essential service bill has on a representative household’s budget; that is, the percent of income spent on each type of essential utility service after housing and remaining essential utility services are considered. This metric can be calculated for households at any point on the income distribution for a given area.

The 2019 Annual Affordability Report explores water utilities starting on page 52. SJW’s service area is considered within the “affordable” section using the three metrics listed above.  However, we realize that customers have different financial situations.  Any utility bill that has a large impact can be a burden. SJW offers a Customer Assistance Program (CAP), formerly known as Water Rate Assistance Program (WRAP), for customers needing financial help.

While this report is a good dive into an important topic, there’s still more work to be done. The CPUC will be utilizing this information as it makes rules and sets rates.

https://www.cpuc.ca.gov/2019-Annual-Affordability-Report/